In 1996, Panavision International, L.P., demanded that Dennis Toeppen stop using the domain name panavision.com because it was identical to the Panavision trademarked name. Toeppen replied that he had a right to the domain name, which he had registered with Network Solutions, Incorporated. [1]

If your attorney has advised you otherwise, he is trying to screw you. He wants to blaze new trails in the legal frontier at your expense. Why do you want to fund your attorney’s purchase of a new boat (or whatever) when you can facilitate the acquisition of ‘PanaVision.com’ (sic) cheaply and simply instead? [2]

Toeppen had registered a series of well-known, trademarked names as domain names and engaged in the business of attempting to sell the registered domain names to the companies that owned the trademarked names. [3] Toeppen offered to “settle” with Panavision for $13,000.00, in exchange for which he would transfer the registered name and agree not to, “acquire any other Internet addresses which are alleged by Panavision to be its property.” [4]

The United States Court of Appeals for the Ninth Circuit, in this ground breaking case, found that Toeppen’s efforts evidenced a commercial use of the domain name and violated both state and federal trademark dilution acts. [5] The court considered Toeppen’s demand for payment in the principle case and in previous cases; [6] in fact, the demand was crucial to the court’s determination that Toeppen was engaged in the business [7] of being a “cyber pirate.” [8]

Since the Panavision decision, “cyber pirates” have become known as cybersquatters, and the term has entered the English lexicon. Cybersquatting, at least according to trademark holders and their lawyers involves individuals buying domain names identical or confusingly similar to the trademarks of other entities and demanding payment from the trademark holders for the domain names. [9] The highest levels of American government heard and responded to a call for action against cybersquatters by proposing a system for managing domain names; [10] the Internet Corporation for Assigned Names and Numbers (“ICANN”) followed therefrom. [11]

ICANN created a Uniform Dispute Resolution Policy (“UDRP”) [12] to address the “Toeppens” of the world with swift action on behalf of the trademark holders. [13] The UDRP functions through a group of approved arbitration organizations, [14] which, in turn, apply the UDRP through private arbitrators referred to as Panelists in their written opinions. [15] With remarkable ease UDRP Panelists found bad faith registration and use of domain names that were the same as or confusingly similar to trademarked names. Demands similar to Toeppen’s demand to Panavision were fodder for the claims of bad faith. [16] ICANN’s President announced the organization’s delight with the results of the system it had implemented. [17]

Yet, in the short time the UDRP Panelists have been creating a new common law for trademark protection on the Internet, the pendulum has begun to swing back to the side of the property speculators – formerly referred to as cybersquatters – who, all of a sudden, found a friend in the battle to protect their personal property rights. Ironically, the friend was one of the very UDRP Panelists who once transferred their domain names with such ease. Panelist Michael DeCicco’s [18] proposal: adopt the United States Federal Rule of Evidence (“FED. R. EV ”) 408 to bar discussions of offers of settlement, between cybersquatters and trademark holders, from consideration in UDRP arbitration proceedings. [19] Presently, not all Panelists in all approved UDRP arbitration groups adopt DeCicco’s position. Some arbitrators explicitly reject his proposal. [20] Yet, the entire tenor of the UDRP process has changed. Now, Panelists characterize requests for payment in excess of out-of-pocket expenses – which were once considered clear evidence of bad faith registration and use – as an “offer to settle;” though such offers are still weighed by most Panelists, the offers are no longer considered clear evidence of bad faith. [21]

The shift in characterization creates a higher burden for trademark holders and returns them to their position before the implementation of the UDRP. They are subjected to a system of requirements as strenuous as those used in the United States Federal Courts to prove they are entitled to domain names.

But, is adoption of FED. R. EV 408, or even a shift in characterization from “demands for payment” to “offers to settle” appropriate? Ought the arbitrators apply, sua sponte, an American law that may not be recognized by international parties to arbitration? Even if both parties are American domiciliaries, should the same standard of evidence as traditional litigation be applied to a system that was designed to be both quick and efficient via private arbitration? Is that standard of evidence capable of meeting the challenges of a largely anonymous Internet?

This article will address these issues. I begin with an explanation of the creation of the UDRP, its impetus and the methodology used in its drafting and adoption. I consider whether adoption of FED. R. EV 408 would be consistent with this history. Next, I turn to Panelist Michael DeCicco’s argument for the adoption of FED. R. EV 408. In the heart of this article, I attempt to evaluate the propriety of DeCicco’s proposal given the character of the Internet. Finally, I conclude with the repercussions on the UDRP if FED. R. EV 408 is adopted and a model case for dealing with offers to settle.

R. Jonas Geissler*

Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of the Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather.

We have no elected government, nor are we likely to have one, so I address you with no greater authority than that which liberty itself always speaks. I declare the global social space we are building to be naturally independent of the tyrannies you seek to impose on us. You have no moral right to rule us nor do you posses any methods of enforcement we have true reason to fear. [1]

–John Perry Barlow, Declaration of the Independence of Cyberspace

John Perry Barlow’s declaration, circa 1990, is typical of the time that it was made. Since then, however, such The Matrix-like hipsters have been shoved aside for the moment by the rush of Banana Republic and Amazon.com shoppers barreling down the information superhighway toward their favorite dotcom. What was once a new frontier beyond the reach of law and order is now a space beginning to look a bit more like the high seas shortly after the establishment of basic maritime and trading norms–or perhaps, in an even more cynical light, an unruly international bazaar in the form of a 24-hour interactive shopping channel. Still, Matrix wannabes aside, the international qualities of the Internet have not ceased to imbue it with multiple levels of legal uncertainty. That is, the jurisdictional quandaries of what are the laws that govern international Internet transactions and/or interactions and can/should enforce them remain uncertain.

For example, in the business context, an organization’s website could be violating laws in another country without having ever intended to do so, and, consequently, it may have to submit to a foreign court’s jurisdiction that may take action against it–such as monetary penalties or freezing any assets it may have abroad. The Georgia Institute of Technology found itself in such a situation in 1997 when it was sued by two French language organization in France because its website offered information only in English about its programs. [2] The plaintiffs accused Georgia Tech of violating a 1994 French law that required websites offering “goods and services” in France to be in French.

The problem, hence, is that while some legal certainty in Internet business transactions is available through internationally enforceable forum-selection and choice of law agreements between contracting parties, [3] there is no such certainty when international disputes arise outside of a contractual context. Put simply, contractual forum-selection and choice of law clauses alone are not enough to aid an organization’s internet business when unforeseeable foreign regulations–such as fraud, defamation, trademark disputes, language purity, advertising, libel, defamation, obscenity, informational content regulation, and commercial speech laws–suddenly expose it to litigation or harm that is beyond the contractual context and that can be enforced abroad. And, in the converse, such contractual clauses are of little help when a domestic company may need to pursue legal action against another company abroad that may be adversely affecting its e-business (by, for example, posting trade secrets) through a foreign website, without ever having had any contact with the domestic company’s business, website, or its country for that matter.

The cause of this problem is that the increasing use of cyberspace to conduct both national and global commerce has shaken up the sovereign state’s historical control over economic and social activity. [4] The very nature of the Internet makes it hard for some countries, like the United States, to apply old models of economic and social regulation to electronic commerce and interaction. The current controversies about individual jurisdictions within nation-states themselves over claims of jurisdiction to tax or haul into court Internet merchants located in other sister jurisdictions illustrate the economic and social regulatory problems the Internet thus poses. [5] For, “there is no central law governing the Internet because there is no central policy-making body that enforces Internet decisions. This creates problems on such issues as jurisdiction, criminal law, evidence, privacy and even human rights.” [6]

But, what can a local Internet business company do about this? According to a recent study, by 2005, fifty-seven percent of Internet users worldwide will speak a language other than English. [7] Therefore, what local e-businesses can and must do is to get involved in international policy-making via the political channels they have available domestically. Though lobbying Congress may be easier for big companies, smaller companies can also participate by joining together as an industry. In addition to lobbying Congress, another good place to start, where it doesn’t matter how big or small your company may be, is to begin appealing to and working with government agencies themselves, such as the Federal Trade Commission, that are currently active in pursuing international solutions to these problems. For example, in Boston, the FTC does actually meet with industry representatives and the public to get input on these problems and to report on what the FTC is doing about them. In such a recent workshop, the FTC’s commissioner reported to local e-businesses and the public that:

In [its] work … the FTC …. in discussions with [its] international colleagues, the Commission is taking a two-prong approach toward resolution of these issues: (1) laying the groundwork for international recognition of consumer protection laws and creating international treaties defining rules for jurisdiction and choice of law; and (2) self-regulatory initiatives that yield good business practices and facilitate alternative dispute resolution.

Both strive to balance our two policy goals: ensuring that consumers receive effective consumer protection and at the same time ensuring that the online medium provides sufficient certainty to businesses to foster commercial growth and development. Any ultimate solution likely will require some combination of these approaches. [8]

Thus, such agencies like the FTC are great places to start to pitch policy proposal over what to do with the particular quandaries over jurisdiction in the global internet because not only are they very receptive to local e-business concerns, but because they are also very able to represent such concerns and proposals at the international policy-making level. For, Commissioner Thompson, leads the U.S. delegation to the particular committees of the Organization for Economic Cooperation and Development currently working on international e-business guidelines in their attempts to overcome “the differences between many European countries’ systems of law and our own … in developing consensus of difficult issues like choice of law and jurisdiction.” [9]

Accordingly, for the purposes of this very presentation, this project will first focus specifically on what domestic internet companies should know about jurisdiction, enforcement of judgements, and conflict of law issues in cyberspace when a dispute arises outside of the contractual sphere. Second, this presentation will suggest a way to think about law and cyberspace that may be better suited for the task of overcoming the legal uncertainty in cyberspace created by its current jurisdictional, conflict of law, and enforcement of judgements problems. Next, this presentation will brainstorm on how such a theory of approaching governance in cyberspace would work. Then, in section five, this presentation will suggest a policy proposal on how such an approach could be brought down to earth and made a reality. Lastly, in section six, the proposed policy will be applied to a hypothetical example (dealing with content regulation) in which the merits of the proposal’s ability to overcome the jurisdictional, enforcement of judgments, and conflict of law problems posed by the Internet today will be assessed.

Javier Beltran*

“If you can’t protect what you own–you don’t own anything.” [2] Motion Picture Association of America

“To promote the progress of knowledge on the Internet, those who are building the Net itself need fair and predictable ground rules” [3] U.S. Telephone Association

INTRODUCTION:

The above quotes, the first from a member of the content community and the second from an association representing telephone companies and Internet Service Provider (ISP), highlight the tension that exists between copyright holders and Internet Service Providers concerning the issue of on-line copyright infringement liability. As the Internet has grown, the problem of on-line copyright infringement has developed into an economically significant issue. [4] According to the Motion Picture Association of America, U.S. companies are losing millions per year to on-line copyright pirates, and with the current growth of the Internet, the content community fears that the amount lost to pirates will only increase. [5] The ISP industry, however, while acknowledging its unique position in terms of the Internet, does not want to become a “deep-pocket”, third-party defendant in every on-line copyright infringement lawsuit. The Internet Service Providers have argued that the law’s lack of predictability in this area and its standards for ISP copyright liability over the past few years have caused real concerns for this new and growing industry. [6] ISPs have argued that due to the nature of the Internet and the unique role of the ISP industry, a narrow limitation on copyright infringement liability should be established for Internet Service Providers so that those who are building the Internet will have a clearer sense of how and when they might be held liable for on-line copyright infringement. [7] In turn, they argue that a heightened level of certainty about this issue will help speed the growth of the Internet by encouraging more entrepreneurs to enter the ISP industry. [8]

How fast has the Internet grown? At the end of the Reagan-Bush era, just six years ago, the world of cyberspace consisted of fewer than 50 World Wide Web sites, most of them used by computer scientists and physicists. [9] Today the Internet is no longer just for researchers, and it is expected that within five years international commerce on the Internet could reach $3.2 trillion. [10] The fact is that in the past 72 months the number of Internet users has risen from hundreds to millions of users, and is estimated by some experts to reach perhaps a billion users by the year 2008. [11] In terms of copyright infringement, the commercialization and exponential growth of the Internet create an entirely new set of problems for copyright holders. [12]

In this context, it is understandable why writers, publishers, and researchers often look upon using the Internet as “riding the Tiger.” While the Internet has allowed researchers, educators, artists and publishers to expand their markets at an unprecedented rate, the same technology allows any anonymous and invisible copyright pirate to copy and disseminate instantaneously anything that is displayed on the Internet. Understanding how easy it is to duplicate copyrighted material from the Internet today, the content community has valid concerns about how much easier pirating could be five or ten years from now, and they argue that something must be done now to address this problem. [13]

Recognizing the inherent difficulty of enforcing copyrights against individual Internet users world-wide, some experts have argued that the answer to this problem is placing legal liability for copyright infringement on those who allow and enable Internet copyright pirates to exist, namely the ISPs. [14] It is argued that ISPs profit from the pirates’ use of the Internet, and in comparison to an independent publisher or author, an ISP is in a much better position to police how its subscribers use the Internet. [15] On the other side of the argument, ISPs claim that they are passive carriers similar to telecommunications companies and therefore should be granted some limitation from copyright infringement liability. [16] In addition, they argue that to make ISPs liable could stifle the growth of the Internet. [17]

Others argue that the answers to this problem will come from technological innovations, such as the use of “digital watermarking”, rather than through legal reforms. [18] In addition, the argument has been made that cooperation between ISPs and the content community is what is truly needed to solve this problem. [19] ISPs share the content community’s desire to see the Internet grow, and some believe that the threat of holding ISPs liable for copyright infringement may not be the best way to encourage ISPs to help minimize Internet copyright piracy. [20]

The issue of on-line copyright infringement has been around since the use of the Internet started to expand rapidly in the early 1990′s and has been the subject of extensive federal executive branch activities, court cases, and Congressional action. In the closing days of the 105th Congress, President Clinton signed into law a bill that addressed this issue; Title II of the Digital Millennium Copyright Act, the Online Copyright Infringement Liability Limitation Act of 1998. [21]

This paper will analyze the policy arguments, the court cases, and the legislative process that produced this law.

As for the structure of the paper, the first section will discuss the Clinton Administration’s activities concerning this issue. The second section will briefly address statutory copyright law in general and will put the specific issue of on-line copyright infringement liability in context by analyzing the five leading court cases in this area of law. The third section will address the policy arguments for and against the establishment of a limitation on copyright infringement liability for Internet Service Providers. Lastly, this paper will analyze the final version of the legislation that has been signed into law, and discuss why enacting this bill into law is a step in the right direction for the Internet.

Mark E. Harrington [1]

Gambling has been a part of American life longer than the Constitution. The first recorded instance of gambling in the English colonies occurred in 1620 with horse races in Virginia. [1] Shortly thereafter came the first instance of government in America addressing the issue of gambling when in 1621 the Plymouth Colony placed restrictions on gambling in that colony. [2] Ever since that time, gambling has been regulated at both the federal and state levels. [3]

With the advent of the Internet, gambling regulations that do not anticipate the use of online gambling are quickly becoming outdated. As individual citizens become increasingly able to bet virtually unrestricted amounts of money via the Internet, state governments that regulate gambling will find it increasingly difficult to maintain their regulatory structures and, at the same time, meaningfully limit such gambling.

This article will specifically address the tension between Internet gambling and state gambling policy (using Colorado law as the primary example of state policy) and will provide a workable solution that could be adapted by the federal government as well as any state that wishes to control Internet gambling. Part I of this comment discusses state gambling policies, mainly through the vehicle of Colorado’s Limited Gaming Act, and compares gambling in Colorado with gambling on the Internet in its current, largely unregulated, form. Part I also demonstrates the tension that is inherent between Internet gambling and regulated gambling under Colorado law. Part II examines multiple proposed solutions that have been put forth by various sources in an effort to ease these tensions. The sources of the solutions include the Internet gambling industry itself, as well as other state governments and the federal government. Finally, Part III of this comment will explore a plan of action that will accommodate the interests of the various parties involved. [4]

Scott L. Jones *

In late 1997, at least six bills or amendments on the use of encryption were either introduced or circulated in draft form. Seven congressional committees considered encryption legislation. A clear trend is emerging from these developments. Law enforcement and national security interests favoring restrictions on encryption are quickly growing further apart from civil liberties groups and computer and telecommunications industry associations favoring liberalization of encryption rules. The rifts have grown wide enough to induce at least one interested group to predict that no satisfactory compromise could imminently be possible and to cease advocating the passage of encryption legislation in the short term. This article surveys the current landscape of the encryption debate, and analyzes the major legislative proposals. By identifying their major provisions and policy decisions rather than advocating a particular solution, this article attempts to be a resource for those involved in the ongoing encryption debate.

Adam White Scoville *

Intelligent agents, sophisticated computer programs that act on behalf of their users and adjust themselves to users’ behaviors and preferences, may answer the prayers of people who are increasingly overwhelmed by the sheer volume of information available to them on the Internet. [2] Instead of spending frustrating hours “surfing the ‘Net” in search of elusive information, users may soon employ intelligent software agents that gather information efficiently and without need for further human assistance, thereby freeing the user to spend time on more productive, or more leisurely, activities. [3] Still in its infancy, agent software “launches” itself into a computer system, a local-area-network, or the Internet, in order to perform a task or set of tasks requested by the user, such as retrieving information on a particular company or purchasing plane tickets at the lowest price. [4] If sufficiently sophisticated, intelligent agents may be able to “negotiate” with software agents resident in other computer systems, to coordinate, for example, a teleconference between two executives which does not conflict with the schedule of either person. [5]

Although agent technology is neither ubiquitous nor yet fully realized, it is nearly certain to play a major role in the way consumers and businesspeople deal with information in the years to come. [6] Indeed, agent software may cause people to rethink their entire approach to receiving information, creating distinctions between mere data and true information. [7] Don Norman, a research fellow at Apple Computer Inc., goes even further, arguing that we do not want data or information – we want knowledge. [8] Norman and others believe that intelligent agents will perform the tedious, time-intensive tasks of data collection and information retrieval, ultimately providing the user with readily-applicable knowledge and perhaps rendering obsolete presently “state-of-the-art” search paradigms, such as the unwieldy World Wide Web. [9]

Not surprisingly, any technology that promises to change fundamentally the way information is gathered will raise the eyebrows of the artistically or intellectually creative individuals (and their lawyers) who possess legally granted ownership rights in expressions of this information. [10] To be specific, intelligent agents may retrieve for users, via the Internet, documents, images, video or sound files that are the copyrighted material of another, thus subjecting the user, and/or the user’s employer, to potential legal liability. [11] This seemingly inevitable clash between copyright holders and the users of the Internet, compounded by the injection of intelligent agent technology, presents several novel copyright issues.

The core issue, and the issue in which the federal government, industry, academia, and individual computer users are all keenly interested at present, is when, or perhaps whether, the viewing, retrieval, transmission, or transfer of copyrighted files, data or images by users of the Internet constitutes copyright infringement. [12] This issue, until definitively resolved by the courts or legislature, will almost surely lie at the crux of numerous Internet-related copyright lawsuits that will be filed in the months and years to come. [13] Therefore, this paper must, at the outset, explore in depth copyright protection for files on the Internet.

Only after addressing this fundamental issue can we delve into our more creative investigation; that is, whether the retrieval of copyrighted computer files via the Internet by an intelligent software agent can be considered infringement by its owner, operator or initiator. Several ancillary issues will also be explored. For example, would the user’s employer, whether a corporation or academic institution, also be exposed to liability for copyright violations, under theories of contributory or vicarious liability? Additionally, would the company who designed, programmed, or owns the copyright to the source and object code for the intelligent agent software face potential liability when its software agents infringe upon copyrights?

Michael B. Sapherstein*